London close: FTSE an oasis as global stocks slip on bond rally

Tue 15 May 2018

LONDON (SHARECAST) - (Sharecast News) - London's FTSE 100 was an island of green on Tuesday, ticking higher as sterling failed to be listed by a solid round of UK jobs data, while stocks around the world were under pressure amid rising Treasury yields.
The UK blue chip benchmark finished up 12.00 or 0.16% at 7,722.98, while the mid-cap FTSE 250 mirrored falls around the globe as it lost ground slightly, though only losing 0.1% to 20,784.92. Sterling was down 0.3% against the dollar at 1.3514 but making a late 0.2% gain on the euro to 1.1389.

The dollar rose and the yield curve steepened, with the US 10-year note hitting 3.06%, was stronger US retail sales data, indicating that consumers are gaining confidence to spend more after some pretty lacklustre readings thus far in 2018.

Earlier, the main UK focus had been on labour market data from the Office for National Statistics, showing average weekly wage growth slowed to 2.6% in March from 2.8% a month before, but that employment expanded at the best quarterly rate for more than two years.

Excluding bonuses, average earning rose 2.9%, the fastest pace since August 2015, while regular pay in the private sector, which has been a key measure cited by the Bank of England, rose 3%.

Unemployment remained at 4.2% but employment increased by 197,000 to 32.34m in the first quarter, the biggest quarterly rise since the end of 2015. In more timely data from the ONS, April's claimant count jumped unexpectedly to 31,200 from 15,700.

UK productivity, however, relapsed in the first quarter of 2018 after a pick-up in the second half of 2017, with output per hour dropping 0.5% quarter-on-quarter after gains of 0.7% and 1.0% in preceding quarters.

Howard Archer, chief economic advisor to the EY Item Club, said: "On balance, the combination of robust employment growth, falling unemployment and stronger underlying earnings growth - as well as a clear relapse in productivity in the first quarter - looks supportive to a Bank of England interest rate hike in August.

"However, much is likely to depend on whether the UK economy sees clear signs of improvement over coming months."

In corporate news, budget airline easyJet flew higher after saying that losses narrowed in the first half as revenues surged nearly 20% to over 2bn for the first time, with the company benefiting from the collapse of Monarch and Air Berlin and troubles at Ryanair.

Housebuilder Taylor Wimpey gained after saying it plans to bump up its dividend payout, while Hargreaves Lansdown ticked higher as the financial services group reported a 3.1% jump in assets under administration in the four months to 30 April.

Ascential edged up as the FTSE 250 specialist information company agreed to sell its exhibitions business to ITE Group for 300m in cash.

Cairn Energy rallied on the back of an upbeat AGM statement, in which it said 2018 is set to be just as active as the previous year and Grainger was a little higher as the residential landlord agreed to buy a 261-home private rented sector build to rent development in Milton Keynes.

Spirax-Sarco Engineering reversed earlier losses as it said that a stronger pound could dent its annual sales and profits by 3% to 5%.

On the downside, Vodafone fell after saying that Vittorio Colao will step down in October after 10 years in the job. The mobile phone operator also announced a 40% rise in full-year pre-tax profit to €3.9bn.

CYBG was under the cosh after saying it swung to a pre-tax loss in the six months to March compared to a profit of 46m the year before. Virgin Money, for which CYBG has made a 1.6bn takeover approach, also lost ground.

BTG lost ground after saying it swung to an annual pre-tax loss on the back of an impairment charge, with guidance for the new financial year softer than hoped.

Land Securities was steady as the property developer reported a small drop in full-year adjusted net asset value per share and said it has appointed Cressida Hogg as its new chairwoman.

Randgold Resources and Glencore were down as they were part of the group of mining companies complaining they had not been given an opportunity to tackle what they regard as major flaws in Congo's new mining laws. The new mining code strips away a stability clause protecting existing investments from changes to the fiscal and customs regime for 10 years, introduces a 50% windfall profits tax and gives powers to the mines minister to raise royalties on minerals considered "strategic".

Precious metals miners were also hit as gold slumped off the back of the stronger dollar and firmer real yields.

In broker note action, Sainsburys was cut to 'underperform' from 'neutral' by Exane BNP Paribas while Petrofac was downgraded to 'hold' at Kepler Cheuvreux and Indivior was cut to 'neutral' at Citi. Coca-Cola HBC fizzed higher as Societe Generale reiterated its 'buy' rating on the stock.

Market Movers

FTSE 100 (UKX) 7,722.98 0.16%
FTSE 250 (MCX) 20,784.92 -0.08%
techMARK (TASX) 3,478.57 -0.72%

FTSE 100 - Risers

Taylor Wimpey (TW.) 202.30p 3.69%
easyJet (EZJ) 1,741.00p 3.32%
Hargreaves Lansdown (HL.) 1,926.00p 2.72%
Barratt Developments (BDEV) 568.20p 2.71%
Compass Group (CPG) 1,559.00p 2.20%
Direct Line Insurance Group (DLG) 370.30p 1.98%
Persimmon (PSN) 2,817.00p 1.84%
Rolls-Royce Holdings (RR.) 840.80p 1.84%
Legal & General Group (LGEN) 282.70p 1.76%
Berkeley Group Holdings (The) (BKG) 4,200.00p 1.52%

FTSE 100 - Fallers

Vodafone Group (VOD) 198.38p -4.26%
Fresnillo (FRES) 1,243.00p -3.38%
Mediclinic International (MDC) 684.80p -2.81%
Paddy Power Betfair (PPB) 7,770.00p -2.57%
BT Group (BT.A) 206.80p -2.36%
Anglo American (AAL) 1,802.60p -2.08%
Land Securities Group (LAND) 950.00p -1.93%
Randgold Resources Ltd. (RRS) 5,808.00p -1.69%
Old Mutual (OML) 252.00p -1.64%
National Grid (NG.) 837.00p -1.56%

FTSE 250 - Risers

Coats Group (COA) 83.50p 7.74%
Computacenter (CCC) 1,346.00p 4.67%
Just Group (JUST) 144.00p 4.58%
FirstGroup (FGP) 113.40p 3.47%
Capita (CPI) 130.10p 3.38%
Cairn Energy (CNE) 247.60p 3.00%
Polypipe Group (PLP) 424.20p 2.81%
Bellway (BWY) 3,433.00p 2.75%
Bovis Homes Group (BVS) 1,298.00p 2.69%
Wood Group (John) (WG.) 676.00p 2.61%

FTSE 250 - Fallers

BTG (BTG) 590.50p -10.87%
CYBG (CYBG) 305.00p -5.63%
Purecircle Limited (DI) (PURE) 341.50p -5.01%
Polymetal International (POLY) 685.40p -3.79%
Inmarsat (ISAT) 382.40p -3.43%
Ferrexpo (FXPO) 232.90p -3.36%
PZ Cussons (PZC) 245.00p -3.09%
Virgin Money Holdings (UK) (VM.) 342.10p -3.01%
Wizz Air Holdings (WIZZ) 3,215.00p -2.78%
Intu Properties (INTU) 195.35p -2.67%
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